Introduction to stocks

Reason to buy and sell stocks, is of course to make money. You want return on your money, so that they grow in value.

This article will teach you everything you need to know to get started to trade stocks (not everything you need to make a profit... that will take years to learn).

Death of the Piggy bank

Home Savings is a bad project, but there are still people who hide away money in a safe at home. You get no interest, and thus extra hard punished by inflation. In addition, you can lose everything by burglary or house fire. Only criminals are served by hiding their money in the mattress.

Why not save money in the bank?

Bank gives you interest on your money. Instead of buying shares, you can put money in the bank. When the risk is lower. If you deposit money in a high interest account you get some interest. Thousand Dollars, for example, grow to 1.034 million in one year.

Risk of bank saving is minimal. It takes a lot before you lose the money you have in the bank. If your bank goes bankrupt, you private funds will be lost forever. In fact, many large banks go bankrupt every now and then, so this is a real treath to your savings.

The problem with bank savings is that interest rates are usually quite low. In addition to tax on the interest you earn money (income tax) and you are debt free, you also get income tax on deposit in the bank. On top of it all, you have inflation (inflation) that "eats up " the little you earn. This is where stocks and shares savings comes in as a great option.

Stock trading is much more likely that you will actually lose money, than bank savings, and it 's pretty boring. Despite the risk of bank saving is minimal compared to stock trading, there are still many who are tempted to engage in stock trading. The reason is simple: If you put money in the bank will will in fact not earn anything, but if you rather place the money in stocks, you can get a spectacular growth.

Make money on shares

Stocks is, as we have mentioned, assets of a company. There is no limit on how many shares a company can be divided in. Let 's say a company has been divided into 100 shares. Do you have 100 shares you 100 % of the company. Do you have 10 shares, you own 10 % of the company. You can buy shares in all companies, as long as someone is willing to sell their shares. You can also buy shares in foreign companies (shares called in English the " stocks ").

Trading stocksis the buying and selling of shares. We can divide the stock trading in the following categories:

• Share Savings. You invest in one or more companies. You see the investment as a long-term savings. Maybe you own a stock for 5 years or more.
• Active stock trading is also called stock trading. You trade stocks actively trade is relatively short (the interval between when you buy and sell a stock is often just a few minutes, or in other cases a few weeks). There are many forms of stock trading. For example, when daytrading you may buy shares you sell again within seconds, minutes or hours later. Commissions (fees on purchases and sales of shares) is a cost we must not forget the active trading.
• Mutual. You put your money in a fund as a bank or broker manages. Here is the second which decides which companies to invest in. The only thing you need to do is choose a mutual fund. As there are others who do the work for you, take the commission, and although equity fund loses money goes with the commission to administer clean. If you do not have the knowledge or the time to engage in stock trading, mutual funds can be an option.

Use the SmartLittleMan site to find everything you need to know to get started in trading, and learn how you make profitable trades.

Options to stock trading

Savings Bank is mentioned, but there are also many other options for trading.

• Forex is a possibility.
• You can invest in their own home.
• Advantage savings to start their own business.
• "play private bank " and lend money to others and make money borrowing rates.
• Or live life here and now, and simply use the money to travel or buy something you really want.

What is wise and not, there is no definitive answer.

Look at what you want to achieve before you place your money.

Risk - Do you have the least risk? Or do you want the opportunity to earn more money, although the risk is higher? As a rule, small risk underperformance, while greater risk may provide greater returns.

You and other- If you want to be active with your investments yourself, or do you want to outsource the job to a professional? You need not be an expert to do well in trading. Economists do not actually get much better than ordinary people in the stock market

Long term or short term - If you want to save money over time, or you want to buy and sell in the short term? "Buy and forget ", or " buy and right afterwards be cut to sell."

Stock trading is suitable for everyone. The risk of trading can be customized, from low - medium risk to high risk. You can trade stocks yourself, or outsource the job to professional managers. In the stock market can be long term or short term.

In the stock market you can make money on traditional stock trading by buying stocks that go up in value, or you can engage in something called shorting and making money on the stocks go down in value. In other words, there are no limits to where and when and how you can make money trading.

Take a look at the SmartLittleMan website, and you can help you find out which type investments that best suits you.